We Harvest a Nice Profit as Utilities Fly High

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As we had previously noted we would harvest profits from time to time as opportunity presented itself.  Opportunity presented itself with water utility Artesian Resources (NASDAQ:ARTNA) jumping $1.39/share today to close near a 52 week high of $33.08.

ARTNA was a legacy holding in the Blended Income portfolio, which was bought for $22.49/share in October, 2014 thus was held for 21 months. We had anticipated that the company would perform well, but the uncertainty in the global economy gave the shares an extra boost and we sold at $33.08/share.  Our gain of near 50% puts the shares at a level which we believe is substantially overvalued with a Price/Earnings ratio of over 25 and a reduced current yield of a meager 2.7%.  When a price is driven this high based upon illogical long term reasoning and the current yield is this low we won’t be sticking around long.  With a price setback of a sizable amount we could be a buyer of this security again, but since we added water utility Aqua America (NYSE:WTR) in January we have continued representation in this sector.

This sale moves our cash position in this portfolio to 17.54%.  Given the turmoil in the markets we will likely harvest more profits soon and build the cash position a bit. Unfortunately there have been few bargains created in the recent selloff, but one never knows when a black swan will strike and what sectors of the market will be hit.




Tim McPartland

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Tim McPartland
Tim McPartland is a private investor with over 45 years of investing experience. His analysis, research and writing is devoted to the hunt for income producing securities of all types, but in particular specializing in preferred stocks, exchange traded debt and Master Limited Partnerships.
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